Economic Co-ordination Committee (ECC) of the Cabinet has allowed export of additional 35,000 Metric Tons (MT) of urea to Sri Lanka, in addition to extending the deadline for export of the remaining quantity of 41,000 MT upto February 28, 2108 despite stiff resistance from Secretary Ministry of National Food Security and Research, official sources told Business Recorder.
Giving the details, sources said, Commerce Division informed the ECC on December 29, 2017 that in order to facilitate export of surplus urea, the ECC on 23rd January, 2017 took the following decisions : (i) export of urea fertilizer upto 0.3 million tons be allowed on the pattern of modalities adopted for export of sugar, implemented and monitored by the State Bank of Pakistan; (ii) export of urea would be effected no later than April 28, 2017; (iii) Fertilizer Review Committee (FRC) would meet immediately after April 28, 2017 to review the exported quantities, and if the originally estimated surplus materializes, the committee may recommend additional quantities of export; (iv) FRC would monitor domestic prices of urea on a monthly basis to ensure that there was no increase in retail price [as per weekly sensitive price index]. FRC would recommend to ECC of the Cabinet for discontinuation of further exports if there was an increase in retail price; and (v) the subsidy available on domestic sales of urea shall not be available for export of urea.
According to sources, Commerce Division further revealed that ECC took the following three decisions: (i) an increase in quantity of urea for export be allowed from 0.3 MMT to 0.6 MMT;(ii) deadline for the export of urea be extended from 28th April 28, 2017 to October 31, 2017; and (iii) other terms and conditions imposed by the ECC on January 23, 2017 on export of urea shall remain applicable.
The Commerce Division revealed that against the approved quantity of 0.6 MMT of urea, only 0.041 MMT remains to be exported. Fertilizer Review Committee (FRC) held a meeting on December 15, 2017, wherein following availability of urea during Rabi 2017-18 was provided according to which closing inventory in October, November and December 2017 will remain at 707 MT, 523 MT and 164 MT respectively. However in January 2018, inventory would be around 198 MT.
The committee discussed the extension and obtained views of the stakeholders regarding allowing export of the remaining quota of 41,000 MT of urea whereupon many of the stakeholders expressed their reservations. It was suggested that it was not safe to extend the timeline for exports of urea during the Rabi season.
However, Ministry of Industries & Production has now clarified that the quantity of 41000 MT stuck at the port since October 31st, 2017 is not part of the strategic reserves. The Ministry of Industries & Production further requested the Commerce Division to submit the case before the ECC for allowing extension in time up to February 10, 2018 to export the remaining quantity of Urea ie 41,000 MT.
The Commerce Division requested ECC of the Cabinet that the deadline for ongoing export of urea allowed may be extended to February 28, 2018 from October 31, 2017.
During the ensuing discussion, the Secretary National Food Security & Research stated that the provinces have reservations on the export of urea; and argue that availability of buffer stock of 200,000 MT of urea should be ensured in the country to meet the requirement for Rabi 2017-18. He stated that November and December 2017 were the peak months for urea demand. However, there would be less demand in January and February, 2018.
Secretary, Commerce Division stated that sufficient stock of urea was available in the country for Rabi crop. The Secretary, Planning, Development and Reform Division emphasized the need to augment urea production to cater the needs of the country.
Prime Minister, Shahid Khaqan Abbasi, who is also the chairman of the ECC, observed that contrary to last year, urea production in the country has increased considerably in 2017 on availability of imported LNG and now surplus urea is being exported. He stated that Sri Lanka is interested in procurement of 76,000 MT of urea from Pakistan. He directed the Commerce Division to make necessary arrangements in this regard.
He agreed to extend the deadline for export of urea from 31st October, 2017 to 28th February, 2018. He further directed that urea being produced using imported gas must be utilized for exports.
After detailed discussion, the ECC approved extension in the deadline for the ongoing export of urea from October 31, 2017 to February 28, 2018 for export to Sri Lanka. An additional quantity of 35,000 MT is also approved to enable total exports of 76,000 MT of urea to Sri Lanka.